Highway Victims Indemnity Fund v. Marach, [1970] SCR 402

Supreme Court of Canada

Highway Victims Indemnity Fund v. Marach, [1970] S.C.R. 402

Date: 1970-01-27

Highway Victims Indemnity Fund (Defendant) Appellant;

and

Frances Marach (Plaintiff) Respondent.

1969: November 26; 1970: January 27.

Present: Fauteux, Abbott, Ritchie, Hall and Pigeon JJ.

ON APPEAL FROM THE COURT OF QUEEN’S BENCH, APPEAL SIDE, PROVINCE OF QUEBEC

Motor vehicle—Injury to passenger—Action instituted against driver and Highway Victims Indemnity Fund under s. 43 of the Act—Joint and several condemnation—Application for payment under s. 36 of the Act—Whether driver’s insurer will benefit by the payment made by the Fund—Subrogation—Highway Victims Indemnity Act, R.S.Q. 1964, c. 232, ss. 36, 37, 39, 43—Civil Code, art. 1103 et seq.

The plaintiff was injured when the automobile in which she was a passenger came to a stop against a tree, the driver having been forced to the shoulder of the highway by a large truck coming at him and not keeping on the right side. Because the truck driver could not be traced, the plaintiff instituted her action in damages against the driver of the automobile and against the appellant under s. 43 of the Highway Victims Indemnity Act, R.S.Q. 1964, c. 232. The trial judge held both drivers at fault; he assessed the truck driver’s liability at 80 per cent and the automobile driver’s at 20 per cent; and he pronounced a joint and several condemnation. The appeal of the driver of the automobile is still pending. Since the appellant did not appeal, the plaintiff made to it an application for payment under s. 36 of the Act, and she declared under oath therein that no insurer would benefit by the amount claimed. The Superior Court dismissed the opposition made by the appellant against the writ of execution which was issued. This judgment was affirmed by the Court of Appeal. The appellant appealed to this Court.

Held: The appeal should be dismissed.

Per Fauteux, Abbott and Ritchie JJ.: Section 43 of the Act creates an independent right of action against the Highway Victims Indemnity Fund in cases where the driver or owner of an automobile causing an

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accident is unknown, and ss. 36 to 42 of the Act have no application to the judgment in such an action. The ordinary rules respecting joint and several liability under the Civil Code apply to the judgment in this case.

Per Hall and Pigeon JJ.: It has not been shown that an insurer will benefit by the amount that the appellant is condemned to pay to the plaintiff. Under s. 39 of the Act, the effect of the plaintiff’s application for payment to the Fund is to subrogate it in her rights against the driver of the automobile and, consequently, against the latter’s insurer. The plaintiff does not rely on subrogation to find her right but only to answer the defence urged by the appellant. In showing that subrogation exists, the plaintiff proves effectively that the driver’s insurer will not benefit by the amount paid to the plaintiff.

APPEAL from a judgment of the Court of Queen’s Bench, Appeal Side, province of Quebec, affirming a judgment of Associate Chief Justice Challies. Appeal dismissed.

Louis-Philippe de Grandpré, Q.C., and Guy Gilbert, for the defendant, appellant.

L.L. Tinkoff, Q.C., and David Goldenblatt, for the plaintiff, respondent.

The judgment of Fauteux, Abbott and Ritchie JJ. was delivered by

ABBOTT J.—The relevant facts are set out in the reasons of my brother Pigeon which I have had the advantage of considering. I agree with him that the appeal should be dismissed but, with respect, I prefer to do so upon the basis of the grounds expressed by Rivard and Brossard JJ. in the Court below.

In her action, respondent sued both one Claude Therrien (the driver of the car in which she was a passenger) and the Highway Victims Indemnity Fund, representing the driver of a second vehicle whose identity could not be ascertained, alleging that the accident was due to the concurrent fault of Therrien and of the unknown driver.

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The action was contested by both defendants. In its defence, appellant did not raise any question as to form or procedure or plead that it had not been validly summoned. Its defence was that no other vehicle was involved in the accident which, it alleged, was due solely to the fault of the defendant Therrien.

Judgment was rendered on September 7, 1966, condemning both defendants jointly and severally, to pay respondent the sum of $33,490.30 with interest and costs. Responsibility was divided as between the two defendants on the basis of eighty per cent to appellant and twenty per cent to Therrien. Therrien appealed from that judgment and his appeal is still pending. The appellant did not appeal and the judgment against it is a final judgment.

Respondent’s action against appellant was founded upon s. 43 of the Highway Victims Indemnity Act, R.S.Q. 1964, c. 232, the English version of which reads

DIVISION XIII

UNKNOWN DRIVER OR OWNER

43. Any person having a claim that could be the basis of an application to the Fund who cannot ascertain the identity of the driver or owner of the automobile that caused the accident may give the Fund a detailed notice thereof.

Failing settlement within sixty days, such person may take action against the Fund and the Fund must satisfy the judgment to the same extent as if it had been rendered against the author of the accident.

In my opinion this section creates an independent right of action against the Highway Victims Indemnity Fund in cases where the driver or owner of an automobile causing an accident is unknown, and ss. 36 to 42 contained in Division XII of the Act have no application to the judgment in such an action. I cannot accept appellant’s contention that the words “a claim that could be the basis of an application to the Fund”, in the first paragraph of s. 43, and the words “must satisfy the judgment to the same extent as if it had been rendered against the author of

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the accident”, in the second paragraph, qualify in any way the nature of a judgment obtained against the Fund. In my opinion, those words are merely descriptive.

Appellant was condemned jointly and severally, with its co-defendant Therrien, as a primary debtor not merely as a surety as appellant contends in its opposition to seizure. I share the view expressed in the Courts below that the ordinary rules respecting joint and several liability under art. 1103 et seq. of the Civil Code apply to that judgment.

I would dismiss the appeal with costs.

The judgment of Hall and Pigeon JJ. was delivered by

PIGEON J.—Respondent was injured in an automobile accident under the following circumstances. She was travelling in the car of one Claude Therrien when the latter was forced to the shoulder of the highway by a large truck coming at him and not keeping on the right side of the road. The shoulder was soft and Therrien lost control of his car which came to a stop against a tree. Because the truck driver at fault could not be traced, respondent instituted her action in damages not only against Therrien but also against appellant under s. 43 of the Highway Victims Indemnity Act, R.S.Q. 1964, c. 232 (hereinafter called the Act).

43. Any person having a claim that could be the basis of an application to the Fund who cannot ascertain the identity of the automobile that caused the accident may give the Fund a detailed notice thereof.

Failing settlement within sixty days, such person may take action against the Fund and the Fund must satisfy the judgment to the same extent as if it had been rendered against the author of the accident.

In the Superior Court, Associate Chief Justice George S. Challies held that the accident was due to the common fault of both drivers in the following proportion: the unknown truck-driver, 80 per cent; Therrien, 20 per cent. Having

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assessed the damages at $33,490.30, he accordingly pronounced a joint and several condemnation in this amount against the two defendants. Therrien has appealed from that judgment and his appeal is still pending.

Since appellant did not appeal from the judgment against it, respondent made to it an application for payment under s. 36 of the Act and, in accordance with s. 37, she declared under oath therein that no insurer would benefit by the amount claimed. Appellant nonetheless refused to satisfy the judgment. Respondent then had a writ of execution issued which appellant opposed on the sole ground that Therrien was, at the date of the accident, insured by Wawanesa Mutual Insurance Co.

The Associate Chief Justice dismissed the opposition. Against the contention that the insurer would benefit by the payment made to satisfy the judgment, he said:

The argument advanced by defendant’s attorney that there will be an indirect benefit, while ingenious, is not in accordance with the facts and the Court cannot accept it. There is under the Act automatic subrogation under Article 39 by the mere application to the Fund. Moreover any cheque issued by the Fund would presumably contain on the back a transfer to the Fund of all the rights of the Fund against defendant Therrien and for these two reasons the payment by the Fund at this time will in no way benefit any insurance company.

The learned Justice then noted that s. 43 is in a separate division of the Act and said that in his opinion appellant cannot in such case invoke ss. 36 to 42.

In appeal, this judgment was confirmed unanimously on this last ground.

Against these decisions, appellant contends that while s. 43 is indeed in a separate division entitled “Unknown driver or owner”, it includes provisions which require the application of the sections found in the preceding division. These provisions are, in the first paragraph of s. 43, the words “a claim that could be the basis of an application to the Fund” and, in the second

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paragraph, the phrase “the Fund must satisfy the judgment to the same extent as if it had been rendered against the author of the accident”.

It must be noted, however, that respondent does not take issue with this first contention of appellant. On the contrary, after the judgment, she took the stand that she had to act as if the judgment had been rendered against the unknown driver and she made the application under s. 36, stating all that which s. 37 requires. What she denies, however, is that under the circumstances Therrien’s insurer will benefit by the payment within the meaning of s. 37 which is as follows:

37. The creditor shall apply to the Fund by a sworn declaration,

(a) establishing that the judgment has in no way been satisfied or indicating, if need be, the amount paid, the value of the thing given in payment or of the services rendered in partial indemnification;

(b) establishing that no insurer will benefit by the amount claimed; and

(c) disclosing any other possible claim arising out of the same accident.

To show that Therrien’s insurer will not “benefit” by the payment, respondent points out that under s. 39 the effect of her application for payment to the Fund is to subrogate it in her rights against Therrien and, consequently, against the latter’s insurer. This is by virtue of the first paragraph which is as follows:

39. The application to the Fund transfers to it all the creditor’s rights without restriction.

Appellant replies that subrogation does not create a right. This may well be, however, in this case respondent does not rely on subrogation to find her right but only to answer the defence urged by appellant. In order to succeed in its opposition it must establish that Therrien’s insurer “will benefit by the amount” paid to respondent. In showing that subrogation exists, it seems to me that respondent proves effectively that this is not so.

Here the situation is not the same as when a motorist insured against collision risks obtains a

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judgment against the driver responsible for an accident in the full amount of the damages he has suffered, including those for which his insurer has compensated him. In such case, although he obtains the judgment in his own name, it is for his insurer’s benefit that he recovers the amount. Of course, he must turn it over to his insurer if he collects it. Here, on the contrary, respondent will have nothing to turn over to any insurer in any case. If Therrien succeeds in his appeal and the condemnation against him is reversed, it is clear that appellant will not be entitled to recover anything of what it will have paid to satisfy the judgment. If, on the contrary, that condemnation is affirmed, appellant will have the opportunity of setting up against Therrien and his insurer all its contentions regarding the application and effect of ss. 36, 37 and 39 of the Act. As the latter are not parties in this case, it is proper to avoid considering the effects of the payment that appellant must make to respondent any further than necessary to decide this appeal. For this reason, I am content to say that the first ground on which the Associate Chief Justice of the Superior Court rejected the opposition appears decisive without considering the second, against which appellant has raised a serious contention.

For the sole reason that it has not been shown that an insurer will benefit by the amount that appellant is condemned to pay to respondent, I would dismiss the appeal with costs.

Appeal dismissed with costs.

Solicitor for the defendant, appellant: G. Gilbert, Montreal.

Solicitors for the plaintiff, respondent: Tinkoff, Seal, Shaposnick & Moscowitz, Montreal.